Biden pledges EV 'playbook' will vault U.S. to dominance; sets new emissions rules
Washington — The CEOs of Detroit's three automakers joined President Joe Biden on the south lawn of the White House Thursday as he set a goal to make half of all new vehicles sold by 2030 emissions-free — just hours before the administration issued new rules requiring 5% annual emissions reductions for Model Years 2024 through 2026.
Earlier, the automakers shared their own aims to sell 40-50% electric vehicles (including battery electric, fuel cell and plug-in hybrids) in the same period. The collective move, powered by new propulsion technology and global reactions to climate change, marks a major change in the industry's attitude toward stiffer emissions rules since the Obama era, when increased fuel efficiency and emissions standards enraged automakers.
"The rest of the world is moving ahead," Biden said. "We've just got to step up — government, labor and industry, working together — what you're seeing here today," Biden said. "We have a playbook, and it's going to work."
Under the proposed emissions standards released late Thursday by the Environmental Protection Agency and the Department of Transportation, automakers foreign and domestic would be required to reduce emissions by 10% over the existing standards for Model Year 2023.
They then would be obliged to reduce emissions by 5% annually for Model Years 2024 through 2026, on par with the rate put in place under former President Barack Obama. Model Year 2026 standards "would be the most robust federal (greenhouse gas) standards in U.S. history," according to an EPA press release.
This time, automakers who are barreling toward electrification with billions of dollars in investments are more likely to be able to meet those standards, experts said.
EPA Administration Michael Regan, Transportation Secretary Pete Buttigieg, Democratic Reps. Dan Kildee of Flint and Debbie Dingell of Dearborn, and Sens. Gary Peters, D-Bloomfield Township, and Debbie Stabenow, D-Lansing, also joined the group of union and industry officials at the event.
General Motors Co. CEO Mary Barra, Ford Motor Co. CEO Jim Farley, Stellantis NV North America COO Mark Stewart and United Auto Workers President Ray Curry milled about with the policymakers ahead of Biden's speech Thursday afternoon.
The automakers' pledges are voluntary, a fact that rankles critics who say the automakers have a history of changing their positions on emissions rules based on who's in the White House. Still, analysts say many of the automakers already are on track to meet those goals.
"Our recent product, technology and investment announcements highlight our collective commitment to be leaders in the U.S. transition to electric vehicles," Stellantis, GM and Ford said in a joint statement. "This represents a dramatic shift from the U.S. market today that can be achieved only with the timely deployment of the full suite of electrification policies committed to by the administration in the Build Back Better Plan," including consumer incentives, charging and R&D investments, and funding for domestic EV manufacturing and supply chains.
EV costs are falling and sales volumes are rising, said Sam Abuelsamid, a principal analyst leading e-mobility research at Guidehouse Insights: "They’re starting to get economies of scale and cost reductions. So they’re shifting well beyond what was agreed to under Trump. Everybody’s back on the same page again."
Much of those promised incentives have yet to be included in the massive bipartisan infrastructure and reconciliation bills being negotiated on Capitol Hill. The bipartisan package includes $15 billion for electric vehicle chargers and buses — $159 billion less than Biden asked for in his initial infrastructure proposal.
The administration still is fighting to get portions of that funding included in the partisan bill that Democrats plan to push through Congress without the support of Republicans. Biden made it clear Thursday that if that funding comes through, he expects automakers to hold up their end of the bargain.
"We need automakers and other companies to keep investing in America," he said. "We need them not to take the benefits of our public investments and expand electric vehicles and battery manufacturing production abroad."
Kildee told The Detroit News Thursday that it's "going to be hard to support" the reconciliation bill if it doesn't include those added investment in electric vehicles. "We're going to do everything we can to get it in."
The new emissions and mileage standards will raise the existing standard of 1.5% annual increases in fuel efficiency and reduction in emissions put in place under former President Donald Trump. And they would exceed the California framework deal of 3.7% increases in efficiency and reductions in emissions and meet the 5% annual emissions decrease put in place under Obama.
"It’s really a dramatic move toward electric vehicles that is very significant," Peters told The News. "This is an incredibly ambitious standard, but one that everybody believes is attainable. Folks need to be focused on the long game.”
While environmental groups largely praised the effort to reduce emissions Thursday, they also said the new rules don't go far enough to make up for lost time under former President Trump, who rolled back the more stringent standards.
The 10% jump in Model Year 2023 is a "course correction," said Dave Cooke, senior vehicles analyst at the Union of Concerned Scientists. But the rule, he added, extends a credit that allows the sale of one EV to count for two for automakers to meet their targets, increases off-cycle credit caps, gives automakers credit for hybrid pickups, and extended the lifetime of certain credits.
"Those loopholes and industry handouts significantly undermine that topline number that we’re asking for," Cooke said. "On paper it’s almost good enough, but they significantly reduced the stringency with a lot of the stuff that they gave to industry."
In addition to setting the goal of 50% EV sales in 2030, the order directed agencies to begin developing long-term fuel efficiency and mileage standards — a move for which the Detroit Three and their rivals are better prepared.
The area around the podium where Biden signed the executive order was lined with electric vehicles from the Detroit automakers, including the Ford F-150 Lightning, the Chevrolet Bolt EUV, the Jeep Wrangler Limited Rubicon 4xE, the GMV Hummer EV and the Ford Mach E Transit Van.
After signing the order, Biden chatted with auto executives and lawmakers before leaving the stage. He hopped into a Jeep Wrangler Rubicon, a plug-in hybrid vehicle, and drove a lap around the south lawn. Climbing out in front of reporters, he noted the last time he drove an electric vehicle was during his visit to Michigan, when he drove the F-150 Lightning.
Missing from the event was Tesla Inc. CEO Elon Musk, leader of the Silicon Valley automaker that sells the most electric vehicles in the country. Asked Thursday whether that was because the automaker is not unionized, Press Secretary Jen Psaki responded: "I'll let you draw your own conclusion."
Biden has said he aims to reach a net-zero emission economy by 2050. Reaching that goal will require stopping the sale of new gas- and diesel-powered vehicles by 2035 and phasing out unabated coal and oil power plants by 2040, according to the International Energy Association.
Some of the world's leading governments have moved aggressively to phase out gas- and diesel-powered vehicles. The European Union has proposed banning the sale of gas engines by 2035. In the United States, California and Massachusetts have committed to the same goal, and 11 other states have considered following suit.
Biden has resisted calls from environmentalists and the governors of 12 U.S. states to implement a similar policy federally. Currently, only around 2% of all new vehicle sales in the United States are electric vehicles.